eSim gets going, ready to level mobile switching barriers

Friday 8 December 2017 | 11:20 CET | Background

The eSIM is finally starting to reach the market. Microsoft launched this month its new Surface Pro laptop with LTE access over an eSim. Apple already offers an eSim on the iPad for some time and has now started selling the Apple Watch with mobile connectivity via an eSim. The mobile industry expects the Sim card to one day go the way of computer discs and CDs; sending a physical object like a Sim in the post is no longer done. If well managed, the eSim could also remove one of the traditional barriers to switching provider, especially for business users: the need to swap Sim cards.

The latest Apple Watch now comes with built-in 4G. Apple did not want a separate slot for the Sim card so is using an embedded SIM, integrated in the processor and memory. This means the network access and permissions need to be configured over the air.

The Apple Watch 3 GPS+Cellular is available to start in just nine countries, including the US, France, Germany, the UK and Switzerland, and at just 1-2 operators in each country. The operators provide an attractive service, where the Watch can use the same phone number as the user's smartphone. This requires a significant amount of behind-the-scenes work to support calls on two different devices. While technically possible, it is a lot of work for a small number of users, hence the limited operator support to start.

GSMA standard targets M2M and wearables

The technology is based on the GSM Association's (GSMA) standard for Embedded SIMs, which was developed with wearables and the IoT in mind. The mobile operators see a big opportunity to supply a lot more Sim cards, with Sim lock. While the eSim is an important move towards eliminating the physical Sim, the implementation of the standard takes time. OTA provisioning can also go wrong, as has been seen with some mobile payment and ticketing projects. The industry needs to invest in completely new platforms to manage the Sims. As long as the client base remains smaller, there is little incentive to invest. T-Mobile said it's still waiting to see how the market develops.

Multi-device plans are already a popular business model for US mobile operators. Each device gets its own Sim and data bundle for mobile internet access, as tethering via the smartphone is not allowed. The EU rules on net neutrality prevent any block on tethering, making the multi-device Sim plans a less obvious play in Europe.

Machine-to-machine (M2M) and IoT are the bigger growth market for the eSim. Small devices in remote or hard-to-reach locations make deploying and changing a Sim card difficult. Mobile operators will be able to provide global connectivity for millions of devices via standard eSims. This will undoubtedly lead to a certain amount of vendor and network lock-in, driven in part by technology and in part by commercial motivations for providers.

SURFnet: Enterprise security over the Sim

The eSIM standard makes it possible to separate a Sim from a hard-coded connection with a specific mobile network. The Dutch research network SURFnet started in 2016 with developing its own eSim platform and showed that it was possible to transfer a Sim from one mobile network to another. SURFnet wants to take advantage of the greater Sim control in order to deliver secured services.

In May this year, SURFnet agreed a partnership with Aspider-NGI to develop verification services. Aspider-NGI focuses on provisioning, connectivity and security, in cooperation with Idemia (the new name of Oberthur). SURF writes applets, tiny applications that run entirely on the Sim. With this it hopes to develop a new form of two-factor authentication, for example for access to Wi-Fi networks.

An end to the troubled Sim swap?

The Sim swap is a recurring problem for IT departments, when the change of mobile provider can mean the need to replace hundreds or even thousands of Sims. Several regulators have struggled to develop ways to ease the switching process for end-users. The eSim could contribute to lowering the barriers to swicthing and provide a boost to competition in especially the enterprise market and for use of critical applications.

This kind of functionaly will require a clear chain of partners. Operators need to cooperate, also with MVNEs developing applications that work across networks. Regulators will also have a role to play, from ensuring numbers work across multiple devices to supporting the switching process.

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